Mortgage lenders funded roughly $33.2 billion of jumbo mortgages during the fourth quarter, a handsome 57% gain from the same period a year earlier, according to survey figures compiled by National Mortgage News' Quarterly Data Report.
Moreover, the production gain was 20 points higher than the 30% overall improvement for all residential lenders during the quarter. (The fourth quarter of 2010 was the industry's best of the year in terms of new originations, with $544 billion of product funded.)
But the strong showing by jumbo lenders did not translate into any jumbo mortgage-backed securities issued during the quarter. In fact, no public jumbo bonds were issued in the three months and only two deals have come to market over the past year — both by Redwood Trust of Mill Valley, Calif. (Redwood's last deal came to market a few weeks ago.)
Many depositories that fund the product continue to place these loans — many of which are "interest-only" mortgages — on their books, market participants said.
The survey found that the three top funders of jumbos during the period were Wells Fargo & Co. with $5.3 billion originated (up 180% compared with the fourth quarter of 2009), JPMorgan Chase & Co. ($4.1 billion, up 75%) and Bank of America Corp. ($3.6 billion, down 13%.)
